One-glance verdict
Within fair range
$9.23 our estimate vs market $14.64
Wall Street consensus: $28.33 (207.1% higher than our fair-value estimate)
59% above our estimate
Fundamentals snapshot
Hallador Energy Company
HNRG · NCM · Utilities · Utilities - Independent Power Producers
Current price
$14.64
52-week range
$13.65 - $24.70
Market cap
$690.18M
Balance sheet
Stretched
3.93x Stretched
Net debt $18.73M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 6/10 years.
- Risk Stock trades 4772.5% above its 5-year average P/E.
- Risk Operating margin compressed from 8.4% to -12.5% over 3 years.
- Risk Insider ownership is only 12.0% (peer median: 17.2%).
What this company does
Hallador Energy Company
Hallador Energy makes money in two connected ways: by mining for coal and by using that coal to run its own power plant, which generates and sells electricity. This is somewhat unusual because the company both produces the fuel and uses it to create the final product, giving it control over its supply chain (the entire process of creating and delivering a product). This control can help the company manage its costs when the price of coal changes.
How the company got here
Founded in 1949, Hallador Energy began its journey focused on oil and gas exploration. Over the decades, it shifted its focus towards coal mining, becoming a significant player in the Illinois Basin, a major coal-producing region in the United States. A pivotal moment came in 2022 when Hallador acquired the Merom Generating Station, transforming the company from solely a coal producer into an independent power producer that both mines fuel and generates electricity.
What it actually does
Think of Hallador Energy as a company that does two main things related to electricity. First, it digs up coal from its mines in the Midwest. Second, it uses a large power plant it owns to burn coal and generate electricity. It then sells this electricity to the power grid, which is the network that delivers power to homes and businesses.
Coal Operations
This part of the business is focused on mining thermal coal, the type used to generate electricity. They operate mines in Indiana and Illinois and sell the coal primarily to electric utilities. This segment functions like a supplier, providing the raw material needed by power plants, including its own, to keep the lights on for their customers. This has historically been the company's core business.
Electric Operations
This is the company's newer and larger business, centered around its Merom Power Plant in Indiana. This massive facility burns coal to create steam, which then spins turbines to generate electricity. Hallador sells this power on the wholesale market to other utility companies and energy traders, who then distribute it to their own customers. This segment now represents the majority of the company's revenue (the total money it brings in from sales).
What management is betting on now
Management's main strategy is to fully integrate its coal and power generation businesses. By owning both the fuel source (the coal mines) and the power plant, they aim to create a more stable and predictable business, less exposed to the price swings of buying coal from others. They are also focused on selling the power plant's output through long-term contracts to lock in future prices and ensure consistent revenue. This vertical integration (owning multiple stages of the production process) is their bet on how to thrive as the energy market changes.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-24.47M
FY2024 Q4
$25.19M
FY2025 Q1
$26.73M
FY2025 Q2
$-1.68M
FY2025 Q3
$3.65M
FY2025 Q4
$-16.78M
FY2026 Q1
$12.81M
FY2026 Q2
$-50.15M
Revenue
$101.50M
Net income
$-15.23M
Diluted EPS
-0.32
Operating cash flow
$-23.89M
Free cash flow
$-50.15M
Fetching…
Sources
Revenue
$101.81M
Net income
$-9.32M
Diluted EPS
-0.20
Operating cash flow
$20.50M
Free cash flow
$12.81M
Fetching…
Sources
Revenue
$101.94M
Net income
$-240.00K
Diluted EPS
-0.01
Operating cash flow
$8.16M
Free cash flow
$-16.78M
Fetching…
Sources
Revenue
$146.85M
Net income
$23.88M
Diluted EPS
0.55
Operating cash flow
$23.20M
Free cash flow
$3.65M
Fetching…
Sources
Revenue
$102.89M
Net income
$8.25M
Diluted EPS
0.19
Operating cash flow
$11.36M
Free cash flow
$-1.68M
Fetching…
Sources
Revenue
$117.79M
Net income
$9.98M
Diluted EPS
0.23
Operating cash flow
$38.42M
Free cash flow
$26.73M
Fetching…
Sources
Revenue
$98.76M
Net income
$-215.79M
Diluted EPS
-5.44
Operating cash flow
$38.95M
Free cash flow
$25.19M
Fetching…
Sources
Revenue
$105.04M
Net income
$1.55M
Diluted EPS
0.04
Operating cash flow
$-12.91M
Free cash flow
$-24.47M
Fetching…
Sources
Is it cheap or expensive?
Fair value $9.23 vs current price $14.64
Wall Street consensus is the average analyst price target: $28.33 (207.1% higher than our fair-value estimate).
Our most-likely fair value is $9.23 a share — about 37.0% away from today's price of $14.64, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $18.7M. Interest coverage 3.9x.
Net debt
$18.73M
Interest coverage
3.93x
Hallador Energy Company's profit covers its interest bill about 3.9 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
HNRG
BASELINE
Hallador Energy Company
Total debt $47.71M Interest coverage 3.93x This is the baseline the peer rows are being compared against.
Total debt $590.87M Interest coverage 9.70x +147% vs HNRG Carries about 2.5x more debt cushion than HNRG.
Total debt $424.90M Interest coverage -0.13x -100% vs HNRG This peer has almost no interest-payment cushion compared with HNRG.
Total debt $468.42M Interest coverage -7.17x -100% vs HNRG This peer has almost no interest-payment cushion compared with HNRG.
Total debt $30.75M Interest coverage 17.46x +344% vs HNRG Carries about 4.4x more debt cushion than HNRG.
What you should know
The case for and against HNRG
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 6/10 years.
Risks
-
Stock trades 4772.5% above its 5-year average P/E.
-
Operating margin compressed from 8.4% to -12.5% over 3 years.
-
Insider ownership is only 12.0% (peer median: 17.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
732.00x
Forward P/E
22.29x
P/B
3.63x
P/S
1.52x
EV/EBITDA
12.10x
PEG ratio
1.26x
Profitability
How much profit each dollar creates
Gross margin
18.5%
Operating margin
-12.5%
Net margin
-0.2%
ROE
-0.6%
ROA
2.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.25x
Current ratio
0.72x
Quick ratio
0.21x
Total debt
$47.71M
Total cash
$28.98M
Growth
How the business has been compounding
Revenue TTM
$452.10M
Revenue 5Y CAGR
17.3%
EPS TTM
0.02
EPS 5Y CAGR
20.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$27.96M
Free CF TTM
$11.92M
FCF margin
2.6%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2020-01-30